Overview of Insurance Web Aggregator License
An Insurance web aggregator is an intermediary or an insurance company that provides information about the insurance offered by different companies through a website or an online portal.
It compares insurance products and their prices on such an online platform to help the customers analyse the best product and make an informed decision before buying any insurance product. The Insurance web aggregator is a business entity registered under the Companies Act 2013 or 1956 and regulated by the Insurance Regulatory and Development Authority of India ( Insurance Web Aggregator) Regulations 2017
An Insurance web Aggregator must obtain an Insurance Web Aggregator licence from the IRDAI before commencing the business operations, which makes it essential for the Insurance Web Aggregator to be aware of the legalities associated with the Insurance Web Aggregator License.
Functions Performed by Insurance Web Aggregators
A web aggregator plays the following roles:
- Providing the relevant information related to insurance products
- Comparison of insurance products.
- Display of information related to insurance products on the website.
- Assisting in the sale of insurance policies
- Solicitation of policies
Who Regulates Insurance Web Aggregator Licence?
The primary regulatory authority for the Insurance Web Aggregator Licence is the Insurance Regulatory and Development Authority of India (IRDAI). The Insurance Act 1938 and the Insurance Regulatory and Development Act 1999 are the regulations behind Insurance law. Apart from this, the Insurance Regulatory and Development Authority of India (Insurance Web Aggregators) Regulations, 2017 provides rules related to Insurance Web Aggregators.
Eligibility Criteria for Insurance Web Aggregator Licence
For granting or renewing the certificate of registration for an Insurance Web Aggregator Licence, the following criteria must be fulfilled-
- The applicant must be the following:
- A Company formed under the Companies Act 2013; or
- Limited Liability Partnership formed under the LLP Act 2008. The partners should not be Non-Resident Indians or a person who is resident outside India under the Foreign Exchange Management Act 1999; or
- Any other individual who is recognised as a web aggregator.
- The object of the business must be insurance Web Aggregation which must be specified in the MOA and AOA.
- The applicant must not be engaged in any other business other than the web aggregation business.
- The applicant must ensure that he is not registered as an insurance agent, corporate agent, micro-insurance agent, TPA, Surveyor and Loss Assessor, Insurance Marketing Firm, or any other insurance intermediary.
- The applicant should not have a referral agreement with the insurer.
- The applicant would be granted only one certificate for insurance intermediation. If any entities are engaged in insurance intermediation activities, then the application for a web aggregator’s licence would be determined based on the application's merits.
- The applicant must have a website for insurance web aggregation.
- The principal officer must possess the necessary qualifications for conducting web aggregation FORM C- Schedule I.
- The principal officer must have undergone the necessary training and passed the examination required by the specified authority.
- The key management executives( Director/ Shareholders/ Other Principal Officers) must fulfil the FIT and PROPER Criteria test in FORM D- Schedule-I
- The authorised Verifier should have gone through the prescribed training and passed the examination conducted by the specified authority.
- The insurance web aggregator has not violated any obligations specified in Form V and Form W.
- The authority has not withdrawn the certificate of registration of the Insurance Web Aggregator Licence.
- The authority should have an opinion that the grant of the certificate will be in the interest of the policyholders.
Capital Requirements for Web Aggregators Licence
- The applicant has to have a minimum paid-up capital of 25 Lakhs.
- Where the Insurance Web Aggregator is a company according to the Companies Act 2013, the capital must be issued and subscribed to in the form of equity shares.
- In the case of an LLP, the partner's contribution must only be in the form of cash.
- The shares of the web aggregator held as capital must not be pledged in any manner to secure credit.
Net Worth Requirements for Web Aggregators Licence
- Net worth must not fall below 100% of the capital requirements.
- The insurance web aggregator must review the net worth status every half year as of 30th September and 31st March every year and report non-compliance, if any. This must be done within 15 days and restore such requirements within 30 days, followed by confirming compliance to the IRDAI.
- If the Insurance Aggregator is unable to maintain the net worth after 30 days, then the business related to the aggregator should be stopped.
- The Chartered Accountant has to submit a net worth certificate every year.
Documents Required for Insurance Web Aggregator Licence
- Certificate of Registration of the Company or LLP as issued by the ROC;
- MOA and AOA of the Company or the LLP Agreement;
- Copy of PAN Card of the Company;
- Profile of the Directors/Partners of the Company or LLP;
- Profile of the Principal Officers along with the educational qualification certificates;
- A brief preview of the contents of the website proposed for License;
- Details about the hosting place of the website;
- Details about the responsible persons for the website’s content;
- Net worth certificate and shareholding pattern of the company as certified by the Chartered Accountant;
- Audited financials for the last three years in case of an existing company or latest as on date in case of a new company;
- Details of the IT infrastructure available with the applicant;
- Organisational Chart with various designations with their roles and responsibilities; and
- A user I.D. and temporary password (with only view permission) to verify the Aggregation Website(s)/Portal/LMS by IRDAI I.T. (Information Technology) Department in a closed cover.
The Principal Officer must attest to the above documents.
Pre –Requisites for the Grant of Insurance Web aggregator License
Certain conditions have to be followed by the applicant for the grant of certificate of registration, such as
- The applicant can only solicit insurance.
- The applicant shall comply with the provisions of the IRDA Act 1999.
- The applicant should inform the authority of any material change or false/ misleading information for previously provided documents.
- The Insurance Web Aggregators should take adequate steps to redress grievances within 14 days.
- The Insurance Web aggregator shall maintain the code of conduct.
- The Insurance Web aggregator shall solicit and procure a reasonable number of insurance policies commensurate with the resources.
- The authority has the power to appoint another investigative agency to check the books and accounts of the web aggregator.
Procedure for Insurance Web Aggregator Licence
The below-mentioned procedure needs to be followed for obtaining the Insurance Web Aggregator License.
Fulfilling the Essential Requirements
The applicant must fulfil the essential requirements mentioned above before filing the application for the license grant.
Filing the Application
An Applicant who wants to register as a web aggregator must make an application in Form- A, along with the application, a fee of Rs. 10,000/- plus tax has to be paid through electronic transfer or demand draft payable in favour of the IRDAI payable at Hyderabad mentioning the services provided by the applicant.
Submission of Application
After filing the application, the applicant needs to submit the application along with the documents to initiate the verification process.
Verification of Application Documents by the Authority
After this, the authority will verify the application and documents to check if the applicant has complied with all the essential requirements. In case of any discrepancy, the application shall be rejected by the authority, and the same will be communicated to the applicant within 30 days of such rejection.
Note- A new application for the certificate of registration can be made only after one year
Issuance of Registration Certificate by the Authority
If the authority feels that registration would be in the interest of the policyholders, then the authority would grant the certificate of registration in Form- E. This would be granted for the applicant to function as an insurance web aggregator.
Validity for Insurance Web Aggregator Licence
The Certificate of Registration (Insurance Web Aggregator Licence) is valid for three years from the date of the issue.
Insurance Web Aggregator Licence Renewal in India
The following procedure is required to renew an Insurance Web Aggregator Licence.
- The application for renewal for the Insurance Web Aggregator Licence should be submitted in Form- F of Schedule II before 30 days of the licence expiration. The applicant can apply for renewal of the licence 90 days before the expiry of the licence.
- Documents should be submitted in Form- G with the application for registration.
- The application for renewal of the registration will be submitted along with the fee of Rs. 25,000 with taxes. The payment must be made electronically or in a demand draft in favour of the Insurance Regulatory and Development Body of India, Hyderabad.
- If an application is made after the expiry of the above period but before the actual expiry of the certificate, then a payment of Rs. 100/- must be made with the application.
- If there is a delay in making an application for registration renewal, the applicant must do the same. Within 60 days of the expiry of the certificate of registration, along with the additional fees of Rs. 750/-.
- Any application received by the authority after the expiry of the 60 days would be considered only after one year. During this one year, the web aggregator must not conduct or solicit any form of business.
- An Insurance Web Aggregator, before seeking a renewal of a certificate of registration, shall ensure that the Principal Officer and the Authorised Verifiers have undergone renewal training, not before six months of the expiry of three years validity of his previous fresh/ renewal training from an institution recognised by the authority.
- If the authority considers that the requirements have been met will provide the certificate of renewal in Form- H.
How can Enterslice help with the Insurance Web Aggregator Licence?
- We file the application form on your behalf to get your business's Insurance Web Aggregator Licence.
- We monitor and track the status of the application on behalf of the client.
- We value your time and money.
- We also offer post-compliance services for your insurance web aggregator business.